One subject
Regulation and your money
16 lessons, 39 glossary terms and 6 market guides cover this across the academy. Each one links to its own page, and nothing is repeated here.
Trading involves risk. You could lose more than your deposit.
The curriculum
16 lessons cover this.
In curriculum order, which is the order you would meet them.
- What a CFD isModule 01What you are actually trading9 min
- What you do not own with a CFDModule 01What you are actually trading7 min
- What a broker does and does not doModule 01What you are actually trading8 min
- How a CFD broker manages its riskModule 05The venue and your counterparty10 min
- What regulation covers and what it does notModule 05The venue and your counterparty9 min
- What segregated client money meansModule 05The venue and your counterparty9 min
- How to verify a licensed firmModule 10Staying safe and your rights9 min
- What regulation protects and what it does notModule 10Staying safe and your rights9 min
- How a trading scam is structuredModule 10Staying safe and your rights8 min
- Signal sellers and third party callsModule 10Staying safe and your rights7 min
- Managed accounts and third party accessModule 10Staying safe and your rights7 min
- What a proprietary trading firm arrangement isModule 10Staying safe and your rights10 min
- Your statements and your recordsModule 10Staying safe and your rights6 min
- How a complaint is raisedModule 10Staying safe and your rights7 min
- Why tax is a question for your own jurisdictionModule 10Staying safe and your rights7 min
- What going live responsibly meansModule 10Staying safe and your rights8 min
The glossary
39 terms belong here.
Alphabetical, each defined in one sentence on its own page.
- Audit trailAn audit trail is the chain of dated records that lets a figure on an account statement be traced back to the instruction that was sent and the fill that answered it.
- AuthorisationAuthorisation is the permission a financial regulator grants to a named legal entity to carry on specified activities, held as a present tense condition that can be varied, restricted, suspended or withdrawn.
- BrokerA firm authorised to arrange or execute transactions in financial instruments for clients, which in retail CFD trading is also the party on the other side of every contract it writes.
- ClearingClearing is the step between a matched trade and its settlement, confirming terms, netting obligations and, on an exchange, replacing the two parties with a central counterparty.
- Client money segregationClient money segregation is the requirement that a licensed firm hold money belonging to clients in accounts separate from its own, reconciled regularly against what is owed to them.
- Clone firmA clone firm is an unauthorised operation that presents itself using the name, registration number or branding of a genuinely licensed firm, so that a verification check appears to succeed.
- ComplaintA complaint is an expression of dissatisfaction that a licensed firm is obliged to record, investigate and answer within a published time limit, with a route of escalation beyond the firm.
- Conduct rulesConduct rules are the obligations a licensed firm owes in how it deals with clients, covering execution, communications, conflicts and records, and they bind the firm's process rather than any market outcome.
- Conflict of interestA conflict of interest is a situation in which a firm's own interest and a client's could point in different directions, which a licensed firm must identify, manage, and disclose where it cannot manage it.
- Contract for difference (CFD)A contract for difference settles in cash the difference between an instrument's opening and closing price, calculated on the full contract value, with nothing delivered and no title passing.
- CounterpartyThe counterparty is the party on the other side of a contract, and on a contract for difference that party is the broker itself rather than an exchange or another client.
- Dealing deskA broker's internal desk that takes the other side of client orders and manages the resulting exposure itself, instead of passing every order out to an external provider.
- Execution onlyExecution only is a regulatory status describing a firm that carries out the instructions it is given and makes no recommendation about what to deal, in which direction or in what size.
- FinfluencerA finfluencer is a social media account that publishes financial commentary or trading content to an audience, and whose posts fall inside financial promotion rules wherever the account is promoting a product.
- Funded accountA funded account is the stage of a proprietary trading firm arrangement reached after an evaluation is passed, in which a participant trades the firm's simulated capital under its rules for a share of any profit.
- Guaranteed returnA guaranteed return is a promise of a fixed profit from trading, which no licensed firm may make and no market can deliver, because a return that is certain is not a return produced by taking risk.
- Initial public offering (IPO)An initial public offering is the first sale of a company's shares to outside investors, after which those shares are admitted to an exchange and priced continuously by whoever is willing to deal in them.
- Know your customer (KYC)Know your customer names the identity verification and ongoing due diligence that anti money laundering law requires a regulated firm to complete before opening an account and to repeat afterwards.
- Managed accountA managed account stays in the client's name while a third party holds written authority to trade it, so the owner still carries every loss the trading produces.
- Market makerA market maker quotes a two-way price and stands ready to deal on its own account at both sides of it, taking the other side of a client's position rather than passing it on.
- Negative balance protectionNegative balance protection limits a retail account's liability to the funds held in it, so a deficit left after a gapping close out is written off rather than owed.
- NettingNetting collapses offsetting obligations into a single one, whether that means reducing long and short size in an instrument to one position or many payments between two parties to one transfer.
- Order routingOrder routing is the path an order takes between the platform it was sent from and the place it is executed, and the rules a firm applies when choosing that path.
- Over the counter (OTC)Over the counter describes a trade agreed directly between two parties rather than through an exchange, so the terms are set bilaterally and each side carries the other as its counterparty.
- Performance claimA performance claim is a statement about past trading results used to promote a product or a person, and it is a regulated communication that has to be fair, clear, not misleading and capable of being evidenced.
- Power of attorneyA power of attorney is a written authority letting a named third party act on an account, and its scope is set by the document rather than assumed, with trading and withdrawal rights granted separately.
- Proprietary trading firmA proprietary trading firm, in the retail sense of the phrase, sells an evaluation that a participant attempts for a fee, and shares a stated portion of any profit recorded on the simulated account that follows.
- ReconciliationReconciliation is the routine comparison of what a firm's own records say it owes clients against what the bank says is actually held in the client accounts, with any shortfall corrected the same day.
- Recovery scamA recovery scam is a second approach made to somebody who has already lost money, offering to retrieve it for an upfront fee, and it targets exactly the people a first fraud has already identified.
- Securities and Commodities Authority (SCA)The Securities and Commodities Authority is the federal regulator of securities and commodities activity in the United Arab Emirates, licensing firms, supervising their conduct and setting the client money rules they operate under.
- Segregated accountA segregated account is a bank account in which a licensed firm holds money belonging to clients apart from its own, identified at the bank as a client account and reconciled against what the firm owes.
- SettlementSettlement is the moment the obligations created by a trade are discharged, when cash and title actually change hands, or, for a cash settled contract, when the difference is paid.
- Short sellingShort selling means selling something not owned in the expectation of buying it back lower, either by borrowing the actual security and returning it later or by taking the selling side of a derivative.
- Trade confirmationA trade confirmation is the record a firm issues after an order is executed, stating the instrument, the direction, the quantity, the price obtained, the time and the charges applied.
- Trading signalA trading signal is an instruction to open or close a specific position, distributed to subscribers by a third party, and it is the output of a decision with the deciding removed.
- Underlying assetThe underlying asset is the market a derivative takes its price from, the currency pair, index, commodity, share or fund whose movement decides the contract's result without ever being delivered.
- Variation marginVariation margin is the money that moves to settle the change in a position's marked value since it was last valued, as distinct from the collateral posted when the position was opened.
- Wire transferA wire transfer moves money directly from one bank account to another across the banking system's own settlement networks, rather than through a card scheme or a payment processor.
- Withdrawal blockA withdrawal block is the stage of a fraudulent scheme at which requests to take money out stop being met, usually behind a demand for a further payment described as a tax, a fee or a release charge.
The market guides
6 guides answer a question about it.
Standalone reference answers, entered laterally rather than worked through.
- Sovereign credit rating reviewsEventsWhat a sovereign rating is and is not, and why outlook and watch carry information the grade does not.
- The contract for difference as an instrumentMechanicsWhat the two parties actually agree, how the settlement arithmetic runs, and how it differs from owning.
- Corporate actions on share CFDsMechanicsWhat happens to an open share contract when the company splits, merges, spins off or is taken over.
- Statements and trade confirmationsMechanicsWhat each document is for, and the four reasons a hand calculation and a statement line disagree.
- SCA regulation and what it coversStructureWhat the federal onshore regulator supervises, and how it differs from the central bank and free zones.
- Client money segregation in the UAEStructureWhat segregation obliges a firm to do, what happens in an insolvency, and the risks it does not address.
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